US stocks extend rally amid investor hopes that central banks are nearly done hiking interest rates

• US stocks opened higher Tuesday, building on strong gains a day earlier.
• The US dollar slid further while the pound sterling gained strength.

US stocks opened higher Tuesday, building on Monday's strong rally, as investors hope that a the end of monetary tightening may be in sight.

The Dow Jones Industrial Average opened nearly 400 points higher, while the Nasdaq surged more than 2%. The US dollar slid further on renewed strength in the pound after the UK government backpedaled a plan to cut taxes for high earners.

A smaller than expected 25 basis point interest rate increase from the Reserve Bank of Australia is fueling market bullishness, as investors anticipate months of monetary tightening could be nearing an end.

Here's where US indexes stood shortly after the 9:30 a.m. ET open on Tuesday:

• S&P 500: 3,738.38, up 1.63%
• Dow Jones Industrial Average: 29,879.95, up 1.32% (389.06 points)
• Nasdaq Composite: 11,049.68, up 2.17%

Here's what else is happening this morning:

• Ray Dalio reversed course on previous comments that "cash is trash," saying Tuesday that "the short-term interest rate is now about right."
• Markets are mistaken in hoping for a dovish pivot by the Federal Reserve, and easing won't happen unless something in the economy breaks according to Mohamed El-Erian.
• US Treasury estimates say a price cap on Russian oil could save billions for buyers in emerging markets.

In commodities, bonds and crypto:

• Oil prices climbed, West Texas Intermediate crude was up 2.48% to $85.71 per barrel. Brent crude, the international benchmark, climbed 2.58% to $91.13.
• Gold ticked up 0.56% to $1,708.77. The 10-year Treasury yield fell three basis points to about 3.61%.
• Bitcoin gained 0.18% to $19,993.15.